Research About The Impact Of Environmental Regulation On Foreign Direct Investment In China

China has been the top ones of FDI inflow around the world, at the same time, theenvironmental issue has been quite serious and the government get down to theER(environmental regulations) for the balanced and sustainable development of theenvironment and economy hoping that the strict environmental regulations can improvethe inflow FDI quality and optimize the industrial structure.The thesis has a theoretical analysis on the mechanism between environmentalregulation and FDI from the angel of micro, macro and game theory; then the currentstatistical analysis are given on the FDI, environment pollution and ER and the conclusionis the two of FDI and ER have the long term relationship; In the empirical research part,the thesis have used the panel statistics of the30provinces during the year of1998to2010and the time series of the country during the year of1985-2011in the expandedeconometric models to research the mechanism of FDI and ER qualitatively andquantitatively, the outcome are that the ER have no distinctive negative impact on the FDIand the two have correlation in the long run., but the grow rate of ER does have distinctivenegative impact on the growth rate of FDI and the1%change at the ER grow rate will leadto the0.018%decline at the FDI growth rate on average; some proposals are givenaccording to the empirical study for the angles of government and firms, the governmentcan give subsidy on the innovation, differential ERs, sever the FDI and enhance theguidance and the oversight mechanism to coordinate the development of the economy andenvironment, the firm can innovate, work together with the other firms in the same field toget all-win, and then realize the well development of the economy and environment.